November 20, 2018
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‘Basic’ gets tricky in health-care law

Should health insurers have to cover treatment of Lyme Disease? What about speech therapy for autistic children? Or infertility treatments?

Can they limit the number of chemotherapy rounds allowed cancer patients? Or restrict the type of dialysis offered to people with kidney disease?

This week an independent advisory group convened by the Obama administration launched what is likely to be a long and emotional process to answer such questions.

It’s hard to overstate the stakes.

Under the health-care overhaul law, beginning in 2014 all new insurance plans for individuals and small businesses will have to include a package of minimum “essential benefits” falling into 10 general categories – ranging from hospitalization, to prescription drugs, to rehabilitative and habilitative services. But Congress largely left it to Secretary of Health and Human Services Kathleen Sebelius to decide how detailed to make the essential benefits package and what exactly to put in it.

Draw up a package that is too bare-bones, and millions of Americans could be deprived of meaningful health-care coverage when they need it most – undercutting a central goal of the new law. Add in too many expensive benefits, and premiums could spike to unaffordable levels.

At a two-day hearing Thursday and Friday held by the Institute of Medicine, even ardent supporters of the health-care law stressed the dangers of this second scenario: If insurance were to be become too costly, many Americans could decide it makes more sense to pay a penalty rather than comply with the law’s requirement that virtually everyone obtain coverage – undermining a cornerstone of the law. Indeed, the law exempts consumers from the mandate to buy insurance if the cost exceeds 8 percent of their income.

Also, while poor people would still be able to use federal subsidies to buy plans on state-run marketplaces, the impact on the federal budget could be catastrophic, ultimately dooming one of President Obama’s signature legislative achievements.

Jonathan Gruber, a prominent economist who helped create the state health plan in Massachusetts, told the panel he estimated that a 10 percent rise in the cost of the essential benefits package would increase the cost of government subsidies by 14.5 percent, or $67 billion, while reducing the share of the insured by 4.5 percent, or 1.5 million, through 2019.

“That must be the number-one thing in your minds,” Gruber said. “To understand the trade-off between our desire to make insurance generous and our desire to make it affordable.”

The 18-member panel, which includes researchers and physicians as well as representatives of both consumer groups and insurers, has already received more than 300 public comments.

The committee, which aims to offer its recommendations as soon as next fall, is not charged with drawing up a comprehensive list of services to be included in the essential benefits package. Instead, Sebelius has asked it to weigh in on a number of key questions – beginning with how detailed to make the package in the first place.

Speakers representing insurers and employers argued that Sebelius should simply ensure that plans are covering the broad categories already laid out in the law. Otherwise HHS risks micromanaging in ways that interfere with insurers’ ability to offer consumers choice and stifle their use of incentives to encourage consumers to control costs.

Some consumer advocates countered that unless HHS spells out the specific services to be covered in each category and prohibits insurers from placing limits on their use, patients could be denied vital care for conditions ranging from obesity to kidney disease. “Access to repeated [kidney] transplants should not be limited,” pleaded Troy Zimmerman of the National Kidney Foundation.

He and other advocates also urged HHS to formally define terms such as “medically necessary,” which, they warned, insurers could otherwise interpret in ways that enable them to deny appropriate care.

“When a 40-year-old obese woman comes to my practice . . .her medical needs dictate that I provide her with obesity education and direct her to nutrition counseling . . . to help her prevent diabetes. But when billed for, these services are usually denied,” said Arnold Cohen, Chairman of the Department of Obstetrics and Gynecology at the Albert Einstein Medical Center in Philadelphia.

Also at issue is language in the law directing HHS to ensure that the essential benefits package is comparable to a “typical employer plan.” Did Congress mean the benefits-rich plans sponsored by large companies? The skimpy offerings purchased by many mom-and-pop concerns? Something in between?

Though several current and former congressional staff members involved in drafting the law testified, their answers were too varied to give a clear sense of Congress’s intent.

The panel also grappled with how much consideration to give existing minimum benefits required by various states.

In some cases, these mandates stem from the high incidence of a particular condition that state – Lyme disease in Connecticut, for example. But James Dunnigan, a member of the Utah House of Representatives complained that in others, “it’s a matter of local politics and not necessarily a reflection of what’s medically necessary.”

States can continue to impose whatever benefits they choose above the minimum essential benefits package. But they will have to cover the extra cost for those plans sold on state-based exchanges.

Dunnigan proposed that HHS allow insurers to offer an essential benefits package that is typical of what employers offer in the given state. Jon Kingsdale, who like Gruber was instrumental in designing the Massachusetts health plan, countered that this would create an workable patchwork of mandates.

After hours of testimony, the panel’s chairman, John Ball, seemed to find only one point on which everyone could agree: “We have an impossible job.”

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